MEXICO: Q1 struggles continue in H1 for Coca-Cola FEMSA

• Half-year net profits slip by 2.1% to MXN5.28bn (US$421m)
• Net sales in six months to end of June flat at MXN70.85bn
• Operating profits rise by 2.3% to MXN9.30bn

Coca-Cola FEMSA has seen its Q1 headache continue through the half-year, with profits dipping on flat sales.

The Mexico-based company said yesterday (24 July) that, in the six months to the end of June, net profits dipped by 2.1% year-on year to MXN5.28bn (US$421m) on sales that inched up by 0.7% to MXN70.85bn. Operating profits for the year so far increased by 2.3% to MXN9.30bn.

For its second quarter, net profits were up by 3.5% at MXN2.81bn as sales stayed flat at MXN36.26bn. Operating profits performed well, climbing by 9.1% to MXN5.14bn.

The profit rise in Q2 made up for the 7.7% decrease in Q1, when sales also remained steady.

Total volumes in the second three months of 2013 rose by 3.5% thanks in part to Coca-Cola FEMSA's Jugos del Valle jugged water operations in Mexico and Colombia. The firm's bottled water brands delivered growth of 6.6% in Q2.

The quarter was boosted by a 6.3% lift in sales from the Mexico & Central America division. This performance countered a "negative translation effect" due to the devaluation of some South American currencies, including the Venezuelan bolivar, the Argentine peso, the Brazilian real and the Colombian peso.

The Q2 results included the numbers from Grupo Fomento Queretano, which it acquired last year, and Grupo Yoli, which it bought in May, for the first time. While quarterly sales from Mexico & Central America were up by 6.3%, sales rose by a more modest 2.6% after stripping out Queretano and Yoli's figures.

Earlier this month, Coca-Coa FEMSA increased its presence in Brazil through the purchase of Companhia Fluminense de Refrigerantes in the country.